In this installment of "The Pulse," TLG Research looks at the economic trends influencing second quarter pricing changes for various parts and service categories. Below are TLG’s thoughts on the matter.

Summer has hit  as have continuing economic issues for many, resulting in continued pressure on maintenance and preventative operations.

In Q1, we noted what appeared to be a continuing softness in the economy regardless of the reports to the contrary in the media. It appears our concerns are coming to pass in Q2. From initial reports, the GDP was flat this quarter, and down from Q1, especially after removing vehicles and fuel. According to a recent release by Gallup, part time employment through February had grown to 20.6 percent of the working population, while full time employment was off, compared to later fall 2012 data. While the overall unemployment picture is flat, it is important to note that much of the growth is either part time and/or lower-paying service sector jobs. We’ll leave it to the popular press to discuss all of the reasons for what’s happening.

3. Flat repair order growth in the shops since it is "only getting fixed if it breaks or we flunk the emission’s test or inspection"

While there is little doubt that there are bright spots in the economy, how long it takes for the growth of full time professional and manufacturing jobs to grow is anyone’s guess. As a result, manufacturers are pressured by their customers to hold prices as a result of their customers getting push-back from their customers.

Look for a continued flatness in price increases near-term. However, when the inevitable bump in interest rates comes or there is real momentum in the economy at large, we’ll see greater increases. Stay tuned…

NOTES

PARTS CATEGORY 1. Based on reported pricing of parts to service repair centers 2. Represents change of current quarter over the prior quarter

SERVICE CATEGORY 1. Represents total job repair order price to prior quarter

PRICING CALCULATIONS The pricing is based on changes in the current quarter relative to the prior quarter. The data is collected from service repair centers with additional service repair center level pricing information provided by Nu-Way Automotive. The "Parts Categories" include only the parts. The "Service Categories" include both parts and labor and is based on the average reported. Pricing is collected in percent change, and is averaged across the U.S. Where needed the data is weighted in order to represent the entire market.

About TLG Research Focused exclusively on all segments of the global automotive industry, TLG Research (TLGR) offers clients a unique approach to obtaining and keeping a global competitive advantage. Recognized as the “Parts Problem Solvers,” TLGR provides information quickly and cost-effectively. Founded in 1992 by Thomas Langer, a 30-year industry veteran, TLGR, through its proprietary database, provides a unique "menu driven" approach to offer services such as price comparisons and strategies, product/market data, channel information, competitive analysis, surveys, new product strategies and technical writing.